Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 07/01/2000, Docket: RP00-288-000, Status: Effective

Original Sheet No. 836 Original Sheet No. 836 : Superseded

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 5 - CAPACITY RELEASE PROGRAM (Continued)

5.10 Invoicing and Payment. (Continued)

Notwithstanding the above, if the Released Transportation Service

Agreement was entered into prior to the effective date of the

Stipulation and Agreement of Settlement filed March 31, 1999

(Settlement), then commencing on the effective date of the

Settlement and continuing through the term of the Released

Transportation Service Agreement, the Release Reservation Rate

component of the Total Release Reservation Charge will be reduced.

The new Release Reservation Rate for the post-Settlement period

will be calculated as follows: If the existing Release

Reservation Rate is equal to the currently effective maximum base

reservation rate, the new Release Reservation Rate will be the

Settlement maximum base reservation rate. If the existing Release

Reservation Rate is less than the currently effective maximum base

reservation rate, the daily equivalent Release Reservation Rate

will be reduced by an amount equal to the difference between the

Release Usage Rate in effect immediately prior to the Settlement

and the usage rate under the terms of the Settlement to determine

the applicable post-Settlement daily equivalent Release

Reservation Rate; provided, however, that the new Release

Reservation Rate component may not exceed the Settlement maximum

base reservation rate and may not be less than the Settlement

minimum base reservation rate. If the Release Reservation Rate is

currently being determined on the basis of a percentage of the

maximum base tariff rate, the current percentage will be applied

to the Settlement maximum base reservation rate, which will then

be reduced by an amount equal to the difference between the

Release Usage Rate in effect immediately prior to the Settlement

and the usage rate under the terms of the Settlement to determine

the applicable post-Settlement daily equivalent Reservation Rate

component.